Australian Stocks End A Three-Day Unbeaten Streak as Commodity Prices Rise

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On Friday, Australian shares stopped a three-day losing skid, supported by increases in mining sectors, in anticipation that China’s relaxation of COVID-19 restrictions will enhance global demand and growth outlook.

The S&P/ASX 200 index .AXJO ended 13% above last year. However, its benchmark dropped by 3.1% in 2022. Though it increased 0.5% to 7,213.2 last week, it has been at its lowest since the 3rd week of October. 

“If China can shift to a path of stronger economic momentum, it will be a positive for the wider Asia region as improving Chinese consumer spending partially offsets softness in Asia exports to the west,” emphasised Kerry Craig, global market strategist at J.P. Morgan.

For context, the strict CoViD-19 restrictions in China have given birth to many social problems. The citizens have started to protest against it. As a result, they loosen the curbs. They expect the move to re-energise its sinking economy and spur demand. However, hurdles from aggressive interest rate hikes and soaring inflation remain.

Craig added that the route to a completely open Chinese economy would be rough as he cited the experience of other countries lifting COVID restrictions.

In Australia, miners.AXMM rose 2% to be the top gainers on the exchange, as data revealed an increase in China’s iron ore imports, implying increased demand from the world’s largest steelmaker. IRONORE/

Rio Tinto RIO.AX, BHP Group BHP.AX, and Fortescue Metals Group FMG.AX all gained between 2.3% and 2.8%.

Gold stocks.AXGD rose 0.8% as prices rose, aided by a weaker dollar. GOL/

Northern Star Resources NST.AX and Newcrest Mining NCM.AX both gained 0.8% and 25 points, respectively.

Meanwhile, local energy stocks.AXEJ declined 0.2% as oil prices remained near their December 2021 lows due to fears about slowing global demand growth. O/R

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